Reassessing the convergence thesis. An analysis of the 2018/2019 Corporate Governance Codes of the United Kingdom and Germany

Inhaltsverzeichnis (Table of Contents)

• A. Introduction
• B. Definition of Corporate Governance
  • 1. Broad Definitions in the Corporate Governance Codes.
  • 2. Narrow Interpretation by Financial Economists ....
• C. Corporate Governance Framework in the United Kingdom and Germany
  • 1. Evolution of the Corporate Governance Codes.....
    • a) The First Corporate Governance Code Originated in the United Kingdom.......
    • b) Development of a Corporate Governance Code in Germany.
  • 2. Classification of the Corporate Governance Systems ....
    • a) The Anglo-American Outsider System ........
    • b) The European Insider System........
  • 3. Factors Leading to a Divergence of Corporate Governance Systems ...
    • a) Law..
    • b) Politics..
    • c) Culture
• D. Globalisation and Convergence of Corporate Governance
  • 1. Internationalisation and Institutionalisation of Equity Ownership..........
  • 2. Convergence of Disclosure Standards.......
• E. A Comparative Analysis of the UKCGC and the GCGC........
  • 1. The Obvious Differences.
    • a) Company Purpose and Stakeholder Engagement ..
    • b) Board Structure...
    • c) Board-Level Employee Representation and Co-Determination ...........
    • d) Directors' Terms of Office.
    • e) Age Limits......
    • f) "Overboarding" and Restriction of Board Mandates.....
  • 2. Similarities and Signs of Convergence
    • a) Application of the Codes.......
    • b) Structure of the Codes
    • c) Corporate Governance Reporting and the “Comply or Explain” Principle......
    • d) Governance Tasks of the Boards.
    • e) Board Committees
      • (i) Audit Committee.
      • (ii) Nomination Committee .......
      • (iii) Remuneration Committee
    • f) Board Independence
      • (i) Executive and Managing Directors' Remuneration......
      • (ii) Non-Executive and Supervisory Directors' Remuneration. ...............
    • g) Appointment, Composition and Diversity on Boards.
    • h) Directors' Remuneration
    • i) Related-Party Transactions.....
    • j) Self-Assessment of Performance.
    • k) Conflicts of Interest
    • g) Meetings of Non-Executive and Supervisory Directors.....
• F. Lessons Learned.……….........
  • 1. GCGC Restructured as Best Practice Approach....
  • 2. Areas in Which the GCGC Has Learned From the UKCGC's Criticisms
    • a) Terms of Office of Supervisory Board Members...
    • b) Limitation of Supervisory Board Mandates.
  • 3. Convergence of the UKCGC towards the GCGC..
    • a) Enlightened Shareholder Value .......
    • b) Board Structure vs Board Practice
    • c) Employee Directors
• G. Conclusion

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This dissertation aims to reassess the convergence thesis of corporate governance by conducting a comparative analysis of the 2018/2019 corporate governance codes of the United Kingdom and Germany. It explores the key themes of:

• The evolution and divergence of corporate governance frameworks in the UK and Germany.
• The impact of globalisation and convergence of disclosure standards on corporate governance.
• The similarities and differences between the UK Corporate Governance Code (UKCGC) and the German Corporate Governance Code (GCGC).
• The lessons learned from the restructuring of the GCGC and the convergence of the UKCGC towards the GCGC.
• The implications of the convergence thesis for corporate governance in both countries.

Zusammenfassung der Kapitel (Chapter Summaries)

• Introduction: This chapter introduces the topic of corporate governance and its importance in the context of corporate scandals. It provides a brief overview of the Volkswagen emissions scandal as a case study for the need for effective corporate governance.
• Definition of Corporate Governance: This chapter explores the different definitions of corporate governance, focusing on both broad definitions found in corporate governance codes and narrow interpretations by financial economists.
• Corporate Governance Framework in the United Kingdom and Germany: This chapter provides a detailed overview of the evolution of corporate governance codes in the UK and Germany. It also examines the classification of corporate governance systems, comparing the Anglo-American Outsider System with the European Insider System. Additionally, it identifies the key factors leading to a divergence of corporate governance systems, including law, politics, and culture.
• Globalisation and Convergence of Corporate Governance: This chapter examines the role of internationalisation and institutionalisation of equity ownership in promoting the convergence of corporate governance standards. It discusses the impact of globalisation on disclosure standards and the resulting convergence of practices.
• A Comparative Analysis of the UKCGC and the GCGC: This chapter presents a detailed comparison of the UKCGC and the GCGC, highlighting their obvious differences and similarities. It covers key areas such as company purpose and stakeholder engagement, board structure, board-level employee representation, directors' terms of office, age limits, "overboarding," and directors' remuneration.
• Lessons Learned: This chapter examines the lessons learned from the restructuring of the GCGC and the convergence of the UKCGC towards the GCGC. It explores areas where the GCGC has incorporated best practices from the UKCGC and highlights specific areas of convergence, such as enlightened shareholder value, board structure vs board practice, and employee directors.

Schlüsselwörter (Keywords)

This dissertation focuses on the convergence thesis of corporate governance, comparing the UK and German corporate governance codes. Key terms and concepts include: corporate governance, corporate governance codes, UK Corporate Governance Code, German Corporate Governance Code, convergence thesis, stakeholder engagement, board structure, employee representation, directors' remuneration, enlightened shareholder value, and best practice.